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How Much Money Do Movies Make in Hollywood?

Posted by Stacy Jones on March 6, 2017 at 11:06 AM


The Box Office And Success

Success in the box office is often unpredictable. For that reason, it is important for many of the stakeholders in a film to know how much money is enough for a film to make in the box office to be considered a success. Unfortunately, the answer is far from simple, with varying film budgets and unpredictable viewership.

However, box office figures combined with production budgets can provide a glimpse into how successful film may or may not have been. In this blog, Hollywood Branded answers the often asked question of how much money do movies make in Hollywood.


DO BOX OFFICE FIGURES REFLECT A FILM'S SUCCESS_.png


The Age Of Film Franchises: The Adaptation, Remake, Reboot And Sequel

There are many reasons why a film may fail or succeed at the box office, many of which are difficult to pinpoint. In addition, box office success has long been widely unpredictable due to the many factors which make audiences decide to see a film or not, such as time of year, how many films people see a year and so on. However, there are certain characteristics which major blockbusters share which provide some insight into why and how they become successful. In particular, a recent trend has seen franchise films soar to the top of the box office. These films are films with large appeal to audiences due to their previous attachment to brands and characters. 

It is often thought that a film which is an extension of a brand already familiar with audiences will have much higher chances of being successful, which is quite often the case with franchise films ranked rather high in box office charts. Taking last year’s total domestic grosses alone there were far fewer films in the top 10 that had no connection to existing sources than those that drew highly from previous films:

  1. Rogue One: A Star Wars Story (Star Wars spin off)
  2. Finding Dory (Sequel to Finding Nemo)
  3. Captain America: Civil War (Marvel Cinematic Universe)
  4. The Secret Life of Pets (no source, sequel already announced)
  5. The Jungle Book (live action remake of animated movie)
  6. Deadpool (Marvel’s X-Men)
  7. Zootopia (no source)
  8. Batman Vs Superman: The Dawn of Justice (DC Extended Universe)
  9. Suicide Squad (DC Extended Universe)
  10. Sing (no source, sequel already announced)

As a result, it may appear that the only chance for a film to be successful is to be part of an existing franchise or at least the beginning of one. However, as with everything in the film industry, there is no guarantee of success.


The Shape Of The Box Office

As the first distribution window that a film will reach, the box office can often be an important indicator for a film’s overall success. While films may have greater successes at other windows, a box office success can often be crucial, with some films finding it difficult to recover from box office losses when they reach the next windows such as DVD/Blu-ray and digital.

For many of the stakeholders in a film the most important question is was the film successful? While this may seem to be a simple question the answer is far from that. Due to the various fees associated with the film it is often hard to put a figure on just how much it cost to produce. However, the production budget serves as a good indication. As discussed above, the performance of Hollywood films is widely varied with some films being widely successful with others struggling to merely break even. This is where the vital question comes in: how much money needs to be made in the box office for a large-budget film to be considered successful. In fact, it should be noted that there is no single sum that a film can reach that makes it successful.


Measuring Box Office Success

Still, it is difficult to indicate at what point a film can be considered successful. For example, taking the worldwide box office top 10 of 2016 into account, there is a considerable difference in box office with over $250,000,000 in the difference between domestic box office receipts of the top grossing film Captain America: Civil War and the tenth highest grossing film Suicide Squad.

Rather, profits should be taken into account, with a film potentially needing to make at least twice the amount invested to be considered somewhat successful and at least three to four times the sum invested to be considered a blockbuster scale success.  A quick way to measure a film's success is to take the cost of production as a percentage of box office return, with worldwide gross providing a fuller glimpse into the film's return on investment than domestic gross.

Taking 2016's Worldwide Box Office Top 10 into consideration, there is no doubt that each of the films in question are widely successful. However, their success may not actually be in accordance with their rank in the box office due primarily to their differing budgets. For example, No.1 Captain America Civil War made 4.63 times its production budget whereas No.2 Rogue One: A Star Wars Story was more profitable making 5.25 its production budget. The third highest grossing film worldwide in 2016, Finding Dory also is more profitable than Captain America: Civil War making 5.14 times its production budget. It's also interesting to note that no. 10 Suicide Squad made 4.26 its production budget, staying comfortably in the blockbuster zone.

Thus, it is clear to see that in the case of box office receipts, money does not talk as making the most money does not necessarily mean being the most successful film as a higher production budget can make all the difference to profit, and of course, a film’s success.


Learn How To Capitalize On Movie Success With Product Placement

Are you interested in integrating product placement into your entertainment marketing mix, but simply don’t know where to start? There is so much more to product placement than you may think,  and it is important to be educated about the key tactics to best fit your brand. Download our Product Placement 101 Infographic today to start learning more!

Product Placement & Co-Promotions 101 Guide


 

Topics: Branded Content & Integration, Strategic Partnerships

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